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Parties Mum on Reported TransCanada-Columbia Talks

Calgary, Alberta-based TransCanada Corp. said Thursday it was in discussions with a third party on a "potential transaction" but no agreement has been reached, reacting to reports in financial news media that it is eyeing a deal with Houston-based Columbia Pipeline Group Inc. Some reports on Thursday speculated that talks had hit a standstill.

Acquisition of Columbia would greatly expand the U.S. footprint of Canada's second-largest pipeline company, adding more than 15,000 miles of pipeline and related facilities and some substantial natural gas storage facilities with direct access into the Utica and Marcellus shale plays.

"Until such time as it is appropriate to make a public announcement on any potential transaction -- should one occur -- TransCanada will not comment further," a Calgary-based spokesperson told NGI on Friday. "There are no further updates at this time."

The spokesperson said TransCanada only commented on the speculation because of a Wall Street Journal report that prompted a flurry of inquiries to the Canadian company. The "third-party discussions," which TransCanada confirmed, have not been talked about previously by the company, the spokesperson said.

TransCanada said late last year that it was interested in a potential acquisition in the Marcellus. The Columbia Group and Columbia Pipeline Partners LP, which held an initial public offering (IPO) in February 2015, includes Columbia Gas Transmission (3 Bcf/d capacity, 12,000 miles and 92 compressor stations in 10 states), Columbia Gulf Transmission (3,400 miles and 11 stations in Louisiana, Mississippi, Tennessee and Kentucky), Crossroads Pipeline with 202 miles of pipeline in Indiana and Ohio, and joint ventures in Hardy Storage, Millennium Pipeline and others, as well as a wholly owned midstream services unit.

Last month, Columbia Pipeline Partners reported increased profits for 4Q2015 and the full year, and its CEO Robert Skaggs said the master limited partnership's (MLP) outlook called for 20% annual distributions to unitholders through 2020, "despite the dislocations of the financial markets." The Columbia MLP is a unit of Columbia Pipeline Group.

Backed by one of the nation's largest utility companies, NiSource Inc., the Columbia MLP IPO shattered records last year when it sold 46.8 million common units and raised about $1.1 billion in the largest such IPO in history (see Daily GPIFeb. 9, 2015).

NiSource and its Columbia Pipeline Group (CPG) were split into two separately traded public companies (see Shale DailySept. 30, 2014) with CPG owning nearly all of NiSource's natural gas transmission, midstream and storage assets, or 15,000 miles of interstate natural gas pipeline, 300 Bcf of natural gas storage capacity and a portfolio stuffed with related growth plans.  NiSource kept the old Columbia Gas utilities operating in seven states.

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